Daewoo founder loses fraud conviction appeal

03-11-2006

Daewoo founder loses fraud conviction appeal
The founder of the collapsed South Korean industrial giant Daewoo has lost an appeal against his recent conviction on charges of embezzlement and fraud.

However, Seoul's high court reduced Kim Woo-choong's jail sentence to eight and a half years, cutting the ten-year sentence that was handed down to the entrepreneur in May.

Kim, who was found guilty of accounting fraud, illegally procuring loans worth billions of dollars and diverting Daewoo funds out of the country through overseas accounts, also had the amount that he had originally been ordered to pay back by the courts cut from 21 trillion won (£22 billion) to 17.9 trillion won (£11.7 billion).

Explaining his decision to reduce Kim's sentence, Judge Suk Ho-Chui said that despite being a criminal, many people in South Korea remembered the defendant as an entrepreneur who "raised the statues of the country".

Kim, 69, bought Daewoo in 1967 when it was a small textile firm and built the company up to become one of South Korea's most significant industrial conglomerates, with the group employing some 320,000 people in 110 countries at its height.

However the group collapsed with more than £80 billion worth of debt in 1999 in the wake of the Asian financial crisis on the late 1990s, prompting Kim to flee the country until 2005.

"He deserves heavy punishment as the collapse of Daewoo Group caused enormous damage to our economy, but we should consider his age, ailment, repentance and contribution to our economy," Judge Suk said, passing the reduced sentence on Kim in a hearing held today.

"A reduced jail term is given in consideration of his pain for watching Daewoo Group's collapse," the judge added.


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